Is Social Networking The Gap in eBay’s Armor?

Is the lack of an integrated social network and reputation management system the Achilles heel of the eBay juggernaut? Overstock.com seems to think so. On Friday, Overstock.com launched a new auction site code-named “Ocean” that is “powered by social networking” and is aimed squarely at eBay.

“We sought a way to integrate the trust inherent in these networks into e-commerce. To achieve this, we have integrated into our auction tab a system that allows for social and business networking unlike any that has ever connected businesses and consumers on-line. It may evolve into a massive, intelligent marketing organism, or into a system of personal introductions, or in some direction we have not foreseen. One thing we do anticipate, however, is that these “reputation networks” will work particularly well for on-line auctions, where buyers, sellers, enthusiasts and experts are traditionally anonymous — and opinions are often biased (as evident in the declining value of ratings and the increasing tendency for retaliatory and spiteful ratings). – Patrick Byrne, President, Overstock.com

A quick perusal of the system yielded a number of pros and cons. Overstock’s president seems to strongly feel that there is significant value in providing this “friendly” (their word) connection between users of the network. And anything that brings rational, personal interaction between buyers and sellers is a good thing in my book. That’s where real relationships come from.

Byrne also clearly recognizes that trust and “reputation networks” are important in building a business and a community. He also is willing to take a risk in this ‘ready, fire, aim” approach…he seems to know that there is *something* there in providing these connections, even if the hard benefits of community-building are not clearly defined. On the other hand, getting “into” the network is a bit of a hassle. Multiple registrations are required (one for Overstock, and then a separate one for the auction and social network).

In aggregate, I view this with guarded skepticism. First off is the increasing issue of “social network spam,” where individuals with even the weakest ties to a person are innundated with “requests to join my network.” Additionally, while the fundamental idea is sound, it will likely be difficult for Byrne to build critical mass in this network for the casual buyer/seller. That being said, those individuals who are very deep into a community, however (such as memorabilia collectors), may embrace this to find other individuals who have similar interests and passions.

Of course, the biggest confusion will be the question of “why?” For the average buyer and seller, what will be the benefits to them of investing the time needed to create, grow and nurture their network?

Real Life Example: Using Social Software To Reach Customers

How did this happen? While most commercial businesses are still trying to figure out the basics, a state government agency in Utah has put up a great example of how to use social software (in this case, a blog) to better connect with customers.

This eGovernment site goes into the details about how they are using their weblogs as a customer relationship management tool:

“…we have a group blog that is accessible by PIOs and others from multiple state agencies to generate the news for our State business portal. We have other multi-party blogging ideas in the works.

We may even use blogging as an inexpensive, easier and more effective way to do customer relationship management / contact management for an internal service fund. For example, each customer agency becomes a category in the (internal facing) blog. People post to the blog category any time they have contact with that agency. Managers and CRMs can subscribe in their aggregator to those agencies (categories) that they have an interest in. Add a search engine to the blog for additional power. You have an effective solution in hours or days rather than months.”

Nicely done! Since our friends in Utah are doing so well in this regard, I would suggest setting up an enterprise social networking conference here as soon as a possible.

Enterprise Social Networking, Blogging Key Customer-Facing Growth Areas

A new report entitled Online Communities in Business contains some great information on how the use of collaboration technologies in business is predicted to evolve over the next 1-to-5 years. Many-2-Many points out that one of the biggest challenges, however, is (still!) measuring ROI; would love comments from anyone who has a novel and/or effective way to do this.

According to the report (pdf here)

“In terms of growth, in the one-year timeframe, teamrooms, weblogs, and social networking show the biggest expected gains”

for customer-oriented and customer-facing collaboration, which covers Customer Care, Marketing and Sales, as well as New Media/Publishing.

UPDATE on the Microsoft CRM debacle: Lead story on CRM Buyer today indicates that Microsoft is starting to contact their CRM customers directly to try and manage the situation.

Social Networking, Business, And Sales

Xeni Jardin has just written a great article for MSNBC called “Online Social Networks Go To Work” that focuses on Enterprise Social Networking. It’s great to see this starting to make it out of the realm of arcana and emerge into the broader business context.

From a “how does this matter to customers?” perspective, UC Berkeley’s Danah Boyd nails the crux of it:

“Salespeople know how to work their black books to make sales, and rolodexes can be a businessperson’s best asset. These Web sites just take that online.”

Ultimately, it’s all about the relationships between customers and the people who are trying to serve them, ain’t it?

Who Do You Want To Do Business With?

While doing some research over the weekend on buyer-seller interactions, I came across a fascinating site called DiverseNation. At first glance, DiverseNation is just another online classifieds directory. But a further look finds something completely different.

What’s different is that the classified listings themselves are shunted off to the side, almost appearing to be an afterthought in the site design. What is front and center is the ability to choose what type of business you want to engage with, based on religion, ethnicity, or gender of ownership.

Whoa. Why don’t we add “political affiliation” to the list while we’re at it and go for the quadfecta of taboo cocktail party conversation?

DiverseNation as a website itself is not going to set the world on fire (a quick perusal through the classifieds shows only one listing), but the model is fascinating. Instead of making the primary search based on the product or service that is desired, DiverseNation seems to be saying that who you might want to do business with is at least as important as the type of business you need to do. This is a radical idea.

This is not limited to sites like DiverseNation. We are even starting to see this kind of clustering actvity starting on some of the social networking sites like Orkut, where there is a flap going on between American and Brazilian users around inclusivity.

There is, of course, the well-worn saw of the “old boys network” and that “birds of a feather flock together.” But there’s something different here. Instead of talking about it in hushed tones near the water cooler, or brushing it off, it’s being presented head-on. Is this a unique occurrence? Or is this the beginning of a trend?